A while back, I put a video out on my Youtube channel describing what a Power of Attorney (POA) is and what it can do for you. Here it is, in case you missed it.
I also posted previously on this blog about what happens to a Power of Attorney in California when you get divorced and your spouse is your POA agent. In this post, I’m going to go over what happens when a POA that has been properly signed is, nonetheless, not recognized. For sake of illustration, let’s say that your elderly mother has signed a POA naming you as her agent. Your mom wants you to manage her money (e.g. pay her bills) and to do that, you need to access her bank accounts, but your mom’s bank is refusing to cooperate with you. What do you do?
The California statute that applies here is Section 4406 of the California Probate Code. One important thing to recognize first, though, is that 4406 only applies to what are called “Uniform Statutory Powers of Attorney”. What this basically means is that 4406 doesn’t apply to any random POA that gets written up, even if it’s written up properly. 4406 only applies to the specific POA that is explicitly specified in the California Probate Code (specifically, section 4401).
If you have a Uniform Statutory Power of Attorney in California and it’s been properly signed by the principal (see CA Probate Code section 4121) and a third-party (e.g. a bank, like in this hypothetical) is refusing to honor it, 4406 provides for the following:
- The agent can sue the third-party to force them to honor the Uniform Statutory Power of Attorney, provided that the principal would have had the ability to do the same;
- That if this third-party is indeed sued in this way, they must pay attorney’s fees for this suit if the court finds that the third-party’s refusal is unreasonable in light of the situation;
- f the third-party’s refusal to honor the Uniform Statutory Power of Attorney is somehow authorized by state or federal law or regulation, then then the third-party’s refusal is not unreasonable;
- However, if the third-party’s only reason for refusing to honor the Uniform Statutory Power of Attorney is that it was not on the correct form that the third-party desires, that refusal is unreasonable.
Hope that helps. I personally have not encountered instances myself where a properly-signed Uniform Statutory Power of Attorney has not been recognized. Every bank I have ever dealt with, for instance, has been big enough to afford armies of lawyers who know their state’s POA laws so improper refusal is — again, in my experience — pretty rare. If a bank does refuse to honor a POA, for instance, I would assume it’s because the POA was signed improperly (e.g. there’s no date on it as, for instance, Section 4121(a) of the CA Probate Code requires).
As always, this blog post is meant to be short and sweet. My goal is only to highlight one particular question or problem that may occur in the real world. This is definitely not meant to be a comprehensive discussion. If you have a situation similar to the one described here, please do find a lawyer in your area to go over what would be the best course of action for your particular situation.